Even with the last-minute, private-sector bailout, CIT (CIT) is still perilously close to the brink of bankruptcy. Felix Salmon runs down the details of the likely bailout, and concludes that all they’ve done is kick the ball down the road a few blocks.
Of course, many have compared CIT to GE Capital, and have wondered why CIT did not get access to the FDIC’s Temporary Liquidity Guarantee Program, when GE Capital did, despite, arguably, being in worse financial shape.
Well, it helps to be bolted onto a gigantic, too-big-to-fail conglomerate.
That being said, it’s worth wondering whether the raison d’etre of the TLGP was to bail out GE Capital. GE Capital has raised $85 billion via the TLGP, a full 25% of the entire program.
GE hasn’t really been bailed out by any other means (no TARP, etc.) but it would’ve had a hell of a hard time raising $85 billion out on the market on its own over the past sevearl months (again, see: CIT).
Was the TLGP really just a GE bailout? And why aren’t they taken to task for this more than they are?
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